The Annual Global Report (AGR) is an annual report prepared by the IBA Global Employment Institute (GEI) highlighting certain general international trends in human resources law. This is the eighth AGR and is based on responses from lawyers in 50 countries. The methodology that was used is described in section 2. The eighth AGR covers trends in human resources law during the calendar year 2018 and, in some cases, the beginning of 2019. Each AGR will build on the historical perspective of previous editions. This may prompt changes to the topics covered in future editions of the AGR.
Please note that it is not the intention or purpose of the AGR to set out the law on any particular topic, but rather its aim is to highlight changes and trends. Any reference to a particular law is not intended to be a description or summary of that law and should not be relied on as a statement of the law or treated as legal advice. Readers should seek appropriate legal advice before taking any action.
Lawyers from 50 countries (Schedule 1) were asked to respond to the questionnaire (Schedule 2). The questions were designed to cover the most relevant issues relating to employment, industrial relations, discrimination and immigration law. Lawyers were asked to consider changes during 2018 (and the start of 2019) and to explain them and their significance very briefly. The answers to the questionnaire have been consolidated and summarised in section 3 of this report (Trends and developments). As previously noted, the AGR's goal is to highlight general international trends in human resources law. Readers seeking more in-depth analysis are welcome to contact the GEI or the lawyers who participated in the survey.
The Council of the GEI appointed a Working Group for the development of the AGR. The members of this Working Group were: Duncan Inverarity (A&L Goodbody, Ireland); Caroline André-Hesse (Ayache Salama, France); Marco Mazzeschi (Mazzeschi, Italy); Filip Saelens (Loyens & Loeff, Belgium); Rebecca Ford (Clyde & Co, United Arab Emirates); and Björn Otto (CMS Hasche Sigle, Germany).
This Working Group, with the coordination of Todd Solomon (McDermott Will & Emery, US, GEI Council Member), were primarily responsible for the AGR. Todd Solomon and his McDermott Will & Emery colleagues updated the questionnaire and contacted lawyers from different countries (Schedule 1), reviewed the completed questionnaires and wrote the draft AGR. Filip Saelens and Björn Otto provided guidance on the development of the questionnaire and identification of attorney contacts, and provided feedback on the draft AGR. The GEI Council wishes to convey its gratitude to all of them for their participation and interest in the development of the survey.
A first draft of the AGR was submitted to qualified senior HR managers and employment counsel in an open meeting on 4–5 July 2019 in Copenhagen.
3. Trends and developments
3.1 Dismissal and retirement issues
Employers continue to be cautious of avoiding any negative consequences associated with wrongful termination procedures in their countries. Responders noted that penalties for failing to comply are severe, which has led employers to comply strictly with the rules. This also reflects the willingness of employees to challenge situations that may involve wrongful termination.
Although many responders did not identify any new developments in this area, some countries have experienced changes. For example:
- In Germany, the Brexit Transition Act passed in early 2019. The Act relaxes the strict rules under the German Dismissal Protection for certain highly paid bankers. Banks no longer need to provide specific reasons, those that would typically be identified as creating 'cause', when terminating these highly paid personnel.
- Supreme Court judges in Peru decided that employees who held a position of trust or management are not entitled to severance pay.
- Canadian courts issued multiple decisions in 2018 upholding the enforceability of contractual severance provisions used to avoid common law notice, which is a change from the precedent in recent years.
- In Spain, a royal decree was recently issued to ensure the equal treatment of men and women with respect to employment. The provisions protect female employees from pregnancy-related dismissals or the return from a leave of absence due to child birth or adoption.
- Certain respondents also noted changes related to the enforceability of restrictive covenants in their countries. For example:
- Multiple European countries identified new legislation related to the protection of confidential information and unfair trade practices that came into force over the last year, including Hungary, the Netherlands and Poland.
- In the United States, there has not been any movement on a federal basis. However, many states are changing their laws to limit the ability of employers to use and enforce restrictive covenants.
As with many types of litigation, the use of alternative forms of resolution, such as mediation and arbitration, remains strong in countries where such forms are allowed. In Hungary, the number of court cases involving employment matters appears to be decreasing. This may be due to the implementation of new procedures in the Labour Code that require employees to seek professional help and therefore incur additional costs in resolving these cases. Some countries are also creating special judicial bodies to hear employment cases. For example, beginning this year, wrongful termination cases in Singapore will be heard by the Employment Claims Tribunal.
As nations continue to struggle to find solutions to an ageing workforce and limited retirement funds, many have raised the retirement age. This is especially true in Europe, including in Germany and Sweden. Conversely, in Portugal employees who have made contributions for many years or started working at a young age are now able to retire without penalty. In Poland, new legislation requires employers to create their own additional retirement arrangements for their employees. South African employers are increasingly reaching agreements with employees to work beyond the normal retirement age.
Courts and legislating bodies remain generally concerned over the treatment of older workers. In Canada, the Human Rights Tribunal of Ontario determined that allowing employee benefit coverage to end at 65 constituted impermissible age discrimination. However, a recent decision in the Netherlands seems to work against this general principle. There, the Supreme Court ruled that termination compensation is not due to employees required to leave work on reaching a certain age and that this does not constitute age discrimination.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.